ICYMI: New Study by Unleash Prosperity Underscores the Devastating Impact of Price Controls

“As always with price controls, supply will be curtailed and market volume reduced.”

In case you missed it, Unleash Prosperity published a study revealing that a 10% interest rate cap on credit cards would have a devastating economic impact on everyday Americans. The study comes at a time when lawmakers are considering imposing price controls on the credit card market in an attempt to alleviate affordability concerns.

The analysis, co-authored by Stephen Moore, former economic advisor to Donald Trump and co-founder of Unleash Prosperity, shows the harms of price controls using credit card rate caps as an example. The analysis concludes that such policies would actually have an adverse effect, causing significant harm to household budgets.

The Harms of Price Controls

Stephen dove into the findings in an op-ed published by Rasmussen Reports, arguing that while the policy is intended to lower costs, setting price controls on credit card interest rates will harm millions of Americans by reducing access to credit, particularly those who rely on it most.

History has proven time and again that price controls result in reduced supply and increased demand, and Stephen drives this point home by noting that “good intentions cannot override the laws of economics.”

He concludes his op-ed with a free market solution: “Let the market work. There’s plenty of free-market competition here: four major credit card companies, and scores of banks issuing them. Let the market decide and let the politicians deal with their own unpaid bills: the $40 trillion national debt.”

What Experts Are Saying

The takeaways from the economic impact study and Moore’s op-ed add to a growing chorus of concern around price controls. Here’s what experts are saying.

• Americans for Free Markets (AFFM) advisors recently warned against rate cap proposals in a joint Fox News opinion column.
• Toomey went on Fox Business’ Varney & Co. and CNN to underline how price controls have historically hurt the very people they intend to help.
• Free market advocate Vance Ginn published an op-ed in Fox News warning against the proposal.
• Think tanks, including the Cato Institute and Americans for Tax Reform (ATR), also shared concerns that rate caps could restrict credit access and place added strain on small businesses and working Americans.

These expert discussions underscore the growing call for a national fair access standard that upholds free market principles and ensures Americans and businesses can grow, compete and innovate — without the burden of government-mandated price controls that risk harming consumers.

Read Stephen Moore’s full article in Rasmussen Reports HERE, and read AFFM’s blog on price controls HERE.